HBC-Saks Deal Brings Another U.S. Retailer North

Hudson’s Bay Co.’s takeover of Saks Inc. feels more like another big U.S. retailer setting up shop in the Great White North than a Canadian retailer heading south.

Although it’s technically a Canadian takeover, the $2.4 billion deal announced early Monday sets the stage for three-century-old department store mainstay Hudson’s Bay to bring luxury retailer Saks into Canada.

U.S. retailers have been pushing north of the 49th parallel at unprecedented rates in recent years. Minneapolis-based Target Corp. alone will open 124 stores in Canada this year, in its first international expansion. North Carolina-based real estate investment trust Tanger Factory Outlet Centers Inc. broke ground this year on its fourth Canadian outlet mall, and plans to have up to six more by the end of the decade. Wal-Mart Stores Inc. and Costco Wholesale Corp., too, are expanding their well-established Canadian footprints, seeking to take advantage of what has historically been viewed as an underserved consumer market.

HBC Chairman and Chief Executive Richard Baker said Monday he hopes to open as many as seven full-line Saks department stores in Canada, and up to 25 of Saks’ smaller-footprint popular discount clearinghouse Off Fifth stores. And he said he hopes to get them up and running “as soon as possible.”

The company also plans to boost Saks’ ecommerce in Canada by establishing a Canadian Saks.com website. Canadians already shop the U.S. Saks website, buying more than any other international market. Mr. Baker said there is “substantial potential to grow this further.”

He pointed to the dearth of luxury online shopping options in Canada, calling the online opportunity “really quite exciting.”

“And as for the brick and mortar luxury experience in Canada, as you know there is really one primary player in that market, and we believe there’s certainly room for competition,” he said. Holt Renfrew is considered Canada’s primary high-end luxury retailer.

The upscale department store chain plans to open eight full-line department stores in Canada–with locations in Calgary, Ottawa, Vancouver and Toronto already announced. It plans to open more than 20 of its popular discount Nordstrom Rack stores across the country.

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Canada Real Time provides insight and analysis into what’s making news in Canada, a country punching above its weight on the world stage thanks to its vast resources and strong banking sector. Drawing on the expertise of The Wall Street Journal and Dow Jones Newswires, we take a look at developments in fields ranging from business to politics to culture. You can contact the editors at canadaeditors@dowjones.com